Between the death of the decedent and the closing of the estate, its assets and debts are under the management of the personal representative. This could be an individual, a professional or even a financial institution. If beneficiaries feel that the personal representative has made choices or taken actions that harm the estate and/or their interest in it, they may have legal recourse.
The California Probate Code explains the ways that a personal representative may breach the fiduciary duty to the estate and be liable for damages.
Ordinary care and diligence
The law does not give exact parameters for liability. Instead, it refers to ordinary care and diligence and states that the details depend on the circumstances of that particular estate. A beneficiary could weigh the personal representative’s actions by assessing whether they are actions any reasonable person in that position would take.
For example, say the personal representative is the brother of the deceased and has no experience with investments. Believing he has a good tip that will make his nieces and nephews more money, the brother makes an investment with the estate’s assets that results in a loss. Regardless of how well-meaning the action is, it was not reasonable.
On the other hand, the situation would be different if an investment banker would have invested the money based on a tip, but the brother does not because he lacks that specialized knowledge to recognize the wisdom of it. The brother’s failure to act would probably not constitute a breach in most cases.
Liability
Ultimately, the law allows the beneficiaries to hold the personal representative liable for losing assets or diminishing the value of the estate. However, judges have the authority to excuse some or all of the liability if they determine that it would be fair to do so, and the personal representative acted in good faith and to the best of his or her knowledge and experience.